How Fraud in the Financial Markets Influence Government...

Millions of people in today’s society entrust their money to various financial markets in an attempt to seek high returns or gains for taking certain risks or even simply creating nest eggs so they can take advantage when their [retirement] day comes. Whether you are investing for short term gains or planning for retirement, a risk is certainly what is being taken when investing your hard earned money. Investors should certainly make informed decisions regarding investment opportunities and heavily scrutinize all potential investments. Unfortunately, as we have seen in recent history with Enron and Bernie Madoff, there are companies and/or individuals that are among us trying to take advantage of what they feel is an opportunity to make†¦show more content†¦Financial fraud has become an uncontainable phenomenon, which influences government and other regulatory authorities to create or impose stricter regulations in order to deter the possibility of other and/or simila r financial scandals. Financial Fraud has been devastating the financial market of America since â€Å"1792, only a few years after America officially became a nation† (Beattie, n.d.). Moreover, financial fraud has been a global issue dating recording as far back as 300 B.C.; when a Greek merchant purchased a large insurance policy and obtained a loan to ship corn, with plans to keep the funds from the loan, cash in on the insurance proceeds for sinking the boat and keeping the corn, but he drowned trying to escape the furious crew that caught wind of his plot (Beattie, n.d.). As you can see, financial fraud has really been around since very early on and continues to plague our world with the many different forms that financial fraud takes on. In the United States, as mentioned previously, financial fraud has been around since approximately 1792, with the first recorded instance of an insider trading scandal, where investors were tipped off, by a man by the name of William Duer, regarding news that determined which way a bonds value would go. Since then, different types of financial scandals with big named players such as J.P. Morgan and Ulysses S. Grant surfaced and have all created their own dent in theShow MoreRelatedAffirmative Adaptation And Modernize Resulting From The Scandal1493 Words   |  6 Pagesnevertheless the actions of this deception let to Varity major future benefits. The effects of Enron without a doubt are primarily disadvantageous. However, although Enron has made illegal and unethical choices the company has paid the ultimate penalty by â€Å"Declared bankruptcy on December 2, 2001 after restating earnings in the 3rd-quarter 10-Q, indicating major problems with special-purpose entities. Investigatio ns by the SEC, Justice Department, and others; executives indicted and class-action lawsuitsRead MoreFailure And Fraud Of Enron1161 Words   |  5 Pagescharacteristics such as failure and fraud that have been linked through time. However, although failure and fraud are connected in several various ways, one tends to come before the other. 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